Needham & Company analyst Chad Messer came out with a strong defense of Cytokinetics (NASDAQ: CYTK) Friday, saying the market misread Omecamtiv data, which creates a buying opportunity for investors. He reiterated a Buy rating and raised his price target from $20 to $25.

"Cytokinetics and partner Amgen are developing omecamtiv mecarbil for acute heart failure," Messer ntoes. "Omecamtiv is poised to enter a pivotal study in 2014, triggering a milestone payment for CYTK shareholders and giving them a "free option" on significant economics in a blockbuster indication. Despite this progress, CYTK shares are trading well off their 52-week high following a Phase IIb omecamtiv readout that met all of our expectations but was touted by the media as a headline failure. Cytokinetics also has a wholly owned drug to treat skeletal muscle disorders with a key Phase IIb readout in early 2014 and a partnered 2nd-generation skeletal muscle program with Astellas."

On the misread of Omecamtiv data, Messer notes: "In September Cytokinetics and Amgen presented omecamtiv Phase IIb ATOMIC-AHF data at the European Cardiology Society (ECS) meeting. The study randomized 613 heart failure patients to placebo or elevating doses of omecamtiv for 48 hours. While the primary analysis of 3 pooled doses vs. placebo on the endpoint of dyspnea (shortness of breath) was not significant, the highest dose of omecamtiv did show significant improvement. Importantly, omecamtiv showed significant increases in systolic injection and reduction in worsening of heart failure while actually lowering heart rate, which distinguishes omecamtiv from the older inotropic agents. We believe these results are more than positive enough for Amgen to proceed with a planned Phase III study next year, triggering a milestone payment to CYTK shareholders and giving a "free option" on significant economics in a blockbuster indication."

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